BoE'S Broadbent sees sharp inflation fall next year

LONDON: Britain's inflation rate should fall sharply next year and lending margins will also come down, Bank of England policymaker Ben Broadbent said in an interview published on Thursday.

Broadbent told the Liverpool Daily Post factors such as a rise in the VAT sales tax and high energy prices accounted for 2 percent of the current inflation rate which hit a 3-year high of 5.2 percent in September.

"The headline rate will fall back pretty sharply, especially as we get to the New Year and VAT rates fall out of comparisons. Inflation will fall in the first part of the next year," the paper quoted him as saying.

He also said he was optimistic that the euro zone crisis would be tackled, relieving pressure on the supply of retail credit throughout UK banks, the paper said.

"Margins in lending will come down and allow business conditions to improve," said Broadbent, who is visiting northwest England as part of a BoE regional visit.